Tarun Chitra
@pinged
One of the most interesting things that those in Ethereum can learn about from Solana is Jito's MEV auction; here are some high level differences: 1. # of auctions isn't fixed per slot; dynamically changes based on txns 2. Set of auctions implicitly defines a DAG of state priority 3. Often more efficient than PBS (!)
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Tarun Chitra
@pinged
Let's try to dive into these features and get some heuristics for why they help 1. Dynamic auctions The number of auctions run in a slot changes based on the transactions; for instance, if there are 6 txns going to 3 different Uniswap pools, then three auctions are implicitly run for each Uniswap pool
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Tarun Chitra
@pinged
Note that the number of auctions depends on the particular state (= Uniswap reserves at program address X) that is touched — if there were only 2 different pools interacted with, then there are only two auctions tl;dr you only _know_ the number of PBS style auctions you run _conditional_ on a set of bundles!
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Tarun Chitra
@pinged
Why do dynamic auctions? A. Parallelism: if state is disjoint, auctions can be run in parallel) B. Streaming: Allow transactions to be streamed directly to proposers rather than need to be collected and batched in a mempool — when a new transaction arrives and touches new state, a new auction is started
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Tarun Chitra
@pinged
C. Lower bid sniping: Different auctions are independent — 'reserve price' is lower as competition is partitioned vs. everyone competing for the same item in a PBS-style single item auction — like a combinatorial clock auction (c.f. Ausubel https://www.ausubel.com/auction-papers/practical-guide-to-the-cca.pdf)
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Tarun Chitra
@pinged
Mathematically, these three things give you _very_ different queueing behavior A single item auction (e.g. PBS) tends to have a classic M/M/1 queue behavior (assuming rational + random bidders) — there's a single auction and it has some notion of probabilistic arrivals https://en.wikipedia.org/wiki/M/M/1_queue
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Tarun Chitra
@pinged
On the other hand, the Jito style auction has an arrival process that looks more like the Chinese Restaurant Process — a probabilistic process where a 'customer' (txn) arrives and joins an existing auction with some probability or starts a new auction ("joins an empty table") with some probability
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